The United States is bankrupt, flat broke. Thanks to accounting that would make Enron blush, America's insolvency goes far beyond what our leaders are disclosing. The United States is a fiscal basket case, in worse shape than the notoriously bailed-out countries of Greece, Ireland, and others.Read more...
The United States is bankrupt, flat broke. Thanks to accounting that would make Enron blush, America's insolvency goes far beyond what our leaders are disclosing. The United States is a fiscal basket case, in worse shape than the notoriously bailed-out countries of Greece, Ireland, and others. How did this happen? In The Clash of Generations, experts Laurence Kotlikoff and Scott Burns document our six-decade, off-balance-sheet, unsustainable financing scheme. They explain how we have balanced our longer lives on the backs of our (relatively few) children. At the same time, we've been on a consumption spree, saving and investing less than nothing. And that's not to mention the evisceration of the middle class and a financial system that has proven it can't be trusted. Kotlikoff and Burns outline grassroots strategies for saving ourselves -- and especially our children -- from what could be a truly catastrophic financial collapse. Kotlikoff and Burns sounded the alarm in their widely acclaimed The Coming Generational Storm, but politicians didn't listen. Now the need for action is even more urgent. It's up to us to demand radical reform of our tax system, our healthcare system, and our Social Security system, and to insist on better paths to investment return than those provided by Wall Street (mis)managers. Kotlikoff and Burns's "Purple Plans" (so called because they will appeal to both Republicans and Democrats) have been endorsed by a who's who of economists and offer a new way forward; and their revolutionary investment strategy for individuals replaces the idea of financial capital with "life decision capital." Of course, we won't be doing all this just for ourselves. We need to fix America's fiscal mess before our kids inherit it.
Publishers Weekly® Reviews
- Reviewed in: Publishers Weekly, page .
- Review Date: 2012-01-30
- Reviewer: Staff
Blame Grandpa for the coming economic collapse? That’s not what Boston University economist Kotlikoff and investment strategist Burns do in this compelling and well-documented follow-up to The Coming Generational Storm. Instead, as politicians legislate more goodies while leaving the bill to future generations, they see us creating “a generational time bomb.” Demographic trends indicate that within half a century, the number of elderly in the industrialized world will for the first time outweigh the number of children. Moreover, these young people will likely pay more in taxes during their lifetimes than they will ever receive in benefits. Kotlikoff and Burns provide chilling examples of the almost inexorable growth in spending: Medicare Part D, which covers prescription drugs, began paying benefits in 2006, but its unfunded liabilities today are trillion, nearly equal to the trillion unfunded liabilities of Social Security. Meanwhile, our national profligancy—“saving nothing and investing next to nothing”—exacerbates the dismal outlook. The authors conclude by suggesting reforms to the banking system and offering investment advice, but their dour first section is what lingers in the mind. As they note, in 1983 the Greenspan Commission “fixed” Social Security, but nearly 20 years later, it’s in worse long-term fiscal shape today. The issues they raise provide timely intellectual fodder for this election year. (Apr.)